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Service Sector, Human Capital Accumulation and Endogenous Growth

Author

Listed:
  • Bidisha CHAKRABORTY

    (Department of Economics, Jadavpur University Kolkata, India)

  • Senjuti GUPTA

    (Department of Economics, Chandernagore Government College, West Bengal, India)

  • Tanmoyee BANERJEE (CHATTERJEE)

    (Department of Economics, Jadavpur University Kolkata, India)

Abstract

The present paper considers endogenous growth model with commodity sector and service sector. It is shown that there exists a unique steady state growth rate of human capital accumulation which works as the source of growth for all other sectors of the economy. This growth rate rises with the output elasticity of skilled labour in both sectors and that of physical capital in commodity sector. It is found from the comparative static analysis that increases in preference towards service good will raise growth rate only if service sector is more intensively dependent on human capital than commodity sector. It is also found that as the productivity of human capital accumulation technology increases, employment of raw labour in commodity sector increases and hence service sector becomes more skill intensive.

Suggested Citation

  • Bidisha CHAKRABORTY & Senjuti GUPTA & Tanmoyee BANERJEE (CHATTERJEE), 2015. "Service Sector, Human Capital Accumulation and Endogenous Growth," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(4(605), W), pages 199-216, Winter.
    • Handle: RePEc:agr:journl:v:xxii:y:2015:i:4(605):p:199-216
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    References listed on IDEAS

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